The experiences of the six states that expanded Medicaid in the years just before the 2014 start of the Affordable Care Act show that costs are hard to predict and new beneficiaries likely suffer from untreated mental health or substance abuse issues, according to a new report.
Since the passage of President Obama's health care overhaul in 2010, five states and Washington, D.C., have expanded coverage to some or all of the low-income population that the federal government will cover completely before phasing down support to 90 percent. All of them—California, Connecticut, Minnesota, New Jersey and Washington state—cover childless adults at varying levels, from 23 percent of the federal poverty line in New Jersey to 200 percent in some California counties. The federal government will cut off expansion coverage at 138 percent of the federal poverty line under the latest eligibility system starting 2014.
Interviews with Medicaid officials in those states formed the basis of the study from the Urban Institute and the Harvard School of Public Health. The report was recently published in the Medicare and Medicaid Research Review, a publication of the Centers for Medicare and Medicaid Services.
The officials, who were protected with anonymity, most mentioned the challenge of predicting expansion enrollment or costs and other planning or administrative issues—a total of more than 30 times in all six states. Coming up second, with 27 mentions in five states, was the high demand for mental health and substance abuse services among expansion populations.
While some of the six states accurately projected how many would sign up, in one unnamed state enrollment doubled initial expectations, prompting calls among legislators to cut back the expansion. That state is Connecticut, where high enrollment fueled a $224 million Medicaid deficit. Even wealthier communities such as Greenwich saw enrollment spikes that officials attributed to the down economy, according to a 2012 Associated Press report. Enrollment in another two states was 20 to 40 percent higher than anticipated, but officials there handled the load with less difficulty, according to the study.
All these states had the advantage of being able to predict enrollment by looking at existing programs that were covering some of the new populations, but some found that they underestimated what they would need to pay the managed-care plans running their Medicaid programs. In one case, it was by more than 12 percent per beneficiary, per month.
The study also found that the behavioral health and substance abuse needs of the newly eligible population, which had gone untreated, have overwhelmed the available services in the states. Previously they didn’t qualify under the disability portion of Medicaid because substance abuse was their main condition, which wasn’t enough for eligibility, noted one official. Two states reported that 9 to 13 percent of the early expansion population suffers from substance abuse disorders. Some 60 percent of those with mental illness also had a concurrent substance abuse problem, according to one official’s estimate.
The study’s authors and other policy analysts have recommended states find ways to expand mental health services and integrate them with primary care to improve access.
The full study can be found here.